Microsoft is pulling back from the carbon removal market that it helped establish, putting a hold on new purchases of carbon removal credits, as sources close to the situation have indicated.
This decision could have serious consequences for hundreds of startups working on technologies aimed at sucking carbon dioxide out of the air, a field that's seen over $5 billion in investment in recent years. Microsoft's been a major player here, making up about 79% of all carbon removal credits bought so far.
The company insists that its overall sustainability strategy is still in place, highlighting that carbon removal is just one part of the puzzle, alongside efforts to cut emissions and increase efficiency. Still, this change comes as rising emissions from the expansion of AI-driven data centers complicate the mission of hitting climate targets.
Technologies for carbon removal like direct air capture, biochar, and enhanced rock weathering are considered crucial for reaching net-zero emissions. But it's a tricky market since it's voluntary, with demand not quite keeping pace with expectations.
The industry has also dealt with challenges due to policies from the Trump administration, which resulted in lower funding and less support for climate initiatives.
Even with some long-term hope, carbon removal projects still operate on a small scale, with only about 1.3 million tons being removed from the atmosphere globally, in stark contrast to the roughly 40 billion tons emitted every year.
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